Wednesday, February 15, 2012

Permits issued by the U.S. Army Corps of Engineers authorize various types of development projects in wetlands and other waters of the United States. The Corps’ regulatory process involves two types of permits: general permits for actions by private landowners that are similar in nature and will likely have a minor effect on wetlands, and individual permits for more significant actions. The Corps uses general permits to minimize the burden of its regulatory program: they authorize landowners to proceed with a project without the time-consuming need to obtain standard individual permits in advance. About 90% of the Corps’ regulatory workload is processed in the form of general permits.

Nationwide permits are one type of general permit. Nationwide permits, which currently number 49, are issued for five-year periods and thereafter must be renewed. They were most recently reissued in total in March 2007. The current nationwide permit program has few strong supporters, for differing reasons. Developers and other industry groups say that it is too complex and burdened with arbitrary restrictions that limit opportunities for an efficient permitting process and have little environmental benefit. Environmentalists say that it does not adequately protect aquatic resources, because the review procedures and permit requirements are less rigorous than those for individual or standard permits. At issue is whether the program has become so complex and expansive that it cannot either protect aquatic resources or provide for a fair regulatory system, which are its dual objectives. Controversies also exist about the use of specific nationwide permits for authorizing particular types of activities, such as surface coal mining operations.

In addition to general objections, interest groups have a number of specific criticisms of the permits, such as requirements that there must be compensatory mitigation for impacts of some authorized activities, impacts of regional conditioning through which local aquatic considerations are addressed, and the need to define “minimal adverse effects” for purposes of implementing the nationwide permit program. Coordinating implementation of the nationwide permits between federal and state governments also raises a number of issues. Of particular concern to states is tension over whether their authority to certify the nationwide permits is sufficient to assure that water quality standards or coastal zone management plans will not be violated.

The nationwide permits issued in 2007 are due to expire March 18, 2012. In anticipation of that date, in February 2011 the Corps proposed to reissue and modify the current permits. One focus of that proposal is modification or repeal of one nationwide permit, number 21, which authorizes discharges associated with surface coal mining activities and has been controversial. The Corps expects to take final action on reissued and modified permits by March 18.

Congressional interest in wetlands permit regulatory programs has been evident in the past in oversight hearings and in connection with bills to fund the Corps’ regulatory programs. For some time, there has been a stalemate over legislation that would revise wetlands regulatory law and that could, if enacted, modify the nationwide permit program. During this time, no consensus has emerged on whether or how to reform overall wetlands policy legislatively. Recently, Obama Administration initiatives and actions intended to restrict harmful effects of surface coal mining activities in Appalachia have drawn congressional attention and criticism that is likely to continue in the 112th Congress and that could include oversight of the Corps’ regulatory program generally.

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The Environmental Protection Agency (EPA) and states are implementing a federally mandated program for controlling stormwater discharges from industrial facilities and municipalities. Large cities and most industry sources are subject to rules issued in 1990, and EPA issued permit rules to cover smaller cities and other industrial sources and construction sites in 1999. Because of the large number of affected sources and deadline changes that led to confusion, numerous questions have arisen about this program. Impacts and costs of the program’s requirements, especially on cities, are a continuing concern.

The 109th Congress enacted omnibus energy legislation (P.L. 109-58, the Energy Policy Act of 2005) that included a provision giving the oil and gas industry regulatory relief from some stormwater control requirements. In May 2008, a federal court vacated an EPA rule implementing this provision; EPA intends to issue a revised rule that repeals the rule that was vacated by the court and codifies the statutory exemption in P.L. 109-58, but the agency does not have a specific schedule for doing so. In the 111th Congress, the House passed a bill that included a provision that would repeal the exemption in P.L. 109-158 (H.R. 3454).

Congress often looks to federal agencies to lead or test new policy approaches, a fact reflected in legislation enacted in the 110th Congress. Section 438 of the Energy Independence and Security Act (P.L. 110-140, EISA) requires federal agencies to implement strict stormwater runoff requirements for development or redevelopment projects involving a federal facility in order to reduce stormwater runoff and associated pollutant loadings. EPA has issued technical guidance for federal agencies to use in meeting these requirements.

In 2009 the National Research Council issued a report calling for major changes to EPA’s stormwater regulatory program which it criticized as being inconsistent nationally and failing to adequately control all sources of stormwater discharge that contribute to waterbody impairment. In response, EPA has expanded regulations and strengthened the current program with a revised rule that it expects to finalize in 2012. The new rule is expected to focus on stormwater discharges from developed, or post-construction, sites, such as subdivisions, roadways, industrial facilities and commercial buildings or shopping centers.

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The principal federal program to aid municipal wastewater treatment plant construction is authorized in the Clean Water Act (CWA). Established as a grant program in 1972, it now capitalizes state loan programs. Authorizations since 1972 have totaled $65 billion, while appropriations have totaled more than $85 billion. It has represented 25-30% of total funds appropriated to the Environmental Protection Agency (EPA) in recent years.

In appropriations legislation, funding for EPA wastewater assistance is contained in the measure providing funds for the Department of the Interior, Environment, and Related Agencies, which includes EPA. Within the portion of that bill which funds EPA, wastewater treatment assistance is specified in an account now called State and Tribal Assistance Grants (STAG). Three trends in the funding of this account are most prominent: inclusion of non-infrastructure environmental grants to states, beginning in FY1993; increasing number and amount of special purpose grants since FY1989; and the addition of grant assistance for drinking water treatment projects in FY1997. This report summarizes, in chronological order, congressional activity to fund items in this account since 1987.

Prior to the 1987 amendments, wastewater treatment assistance was provided in the form of grants made to municipalities. The federal share of project costs was generally 55%; state and local governments were responsible for the remaining 45%. The 1987 amendments altered this arrangement by replacing the traditional grant program with one that provides federal grants to capitalize state clean water loan programs, or state revolving funds (SRFs). Appropriations for the clean water SRF program through FY2012 have totaled $36 billion. As a general matter, states and cities support the program changes made by the 1987 amendments and the shift to a loan program that was intended to provide long-term funding for water quality and wastewater construction activities. However, the change means that local communities now are responsible for 100% of projects costs, rather than 45%, because they are required to repay loans to states. The greater financial burden of the act’s loan program on some cities has caused some to seek continued grant funding.

This has been particularly evident in the appropriations process where, in recent years, Congress has reserved as much as 30% of funds in the STAG account for special purpose grants directed to specified communities. Since FY2000, appropriators have awarded earmarks to a larger total number of projects, resulting in more communities receiving such grants, but at the same time receiving smaller amounts of funds, on average. Most of the funded projects are not authorized in the Clean Water Act or the Safe Drinking Water Act. State water quality officials, state infrastructure financing officials, and EPA have objected to this practice, since it reduces the amount of funding for state SRF programs. Since FY1997, the STAG account also has been used to fund a drinking water SRF grant program established by Congress in 1996. Appropriations for the drinking water SRF program through FY2012 have totaled $15.4 billion.

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On December 8, 2011, the U.S. Environmental Protection Agency (EPA) issued a draft report on its investigation of groundwater contamination near the town of Pavillion, Wyoming. Under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), residents of Pavillion petitioned EPA, asking the agency to investigate whether groundwater contamination exists, its extent, and possible sources. Following the petition, EPA began its investigation three years ago. Although the final report may contain revised or more specific conclusions, the draft report indicated that EPA had identified certain constituents in groundwater above the production zone of the Pavillion natural gas wells that are consistent with some of the constituents used in natural gas well operations, including the process of hydraulic fracturing. In its report, EPA claimed that its approach to the investigation best supports the explanation that inorganic and organic compounds associated with hydraulic fracturing have contaminated the aquifer at or below the depths used for domestic water supply in the Pavillion area. EPA also stated that its approach indicates that gas production activities have likely enhanced the migration of natural gas in the aquifer and the migration of gas to domestic wells in the area. EPA did not appear to conclude that there was a definitive link to a release from the production wells, nor to the constituents found in domestic wells in shallower parts of the aquifer.

Because the draft report linked groundwater contamination in the deeper portions of the Wind River Formation aquifer to activities related to hydraulic fracturing during natural gas production in the area, it raised concerns about hydraulic fracturing practices in general. Organizations representing portions of the natural gas industry and other stakeholders took issue with some of the findings in the draft report, and questioned the scientific validity of EPA’s contention that “the explanation best fitting the data for the deep monitoring wells is that constituents associated with hydraulic fracturing have been released into the Wind River drinking water aquifer at depths above the current production zone.”

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